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Is there a good system for employee engagement and retention for a startup?

Is there any good system like Tiny Pulse for employee retention and development? something that can easily measure whether employees are challenged and happy so we can reduce staff turnover?

I only have seen one approach at one company that I worked for, but I think Tiny Pulse was not enough to maintain people. I understand there are lots of factors, but I'm looking for a software solution that is not expensive

Agree with Shaun's answer: Infrastructure and KPI's are not necessary until your organisation gets to a size, where the management team does not know everyone.

If you want to measure engagement, build a process, that ensures that managers regularly interact with all employees once a week, month, quarter - depending on your needs for dialogue. And have the managers report back to CEO how things are. I think you will learn more instead of just measuring. Measuring is easy - changing processes based on feedback is hard, because it is about culture. If you ask, be prepared to change based on the feedback.

Employee retention is easy to measure by comparing your staff month on month on some ID-key (employee number, social security number or similar). If you are there in one month, and not in the next, you are gone. Reverse means you are new.

Let me just finish this by commending you on your focus on the softer side of things. I think it is good, and I am sure by focusing on it, you can create an environment, where people are happy to work and will be engaged.

I do not know if your team is virtual or office based but I highly recommend http://www.teamphoria.com/Thier offering means that you can send out surveys or use peer to peer kudos. It is also a great help during performance reviews
Their customer service is great and the grow with you.
Let me know if you need further information or would like to talk further about employee engagement.

Show a genuine interest in your people's career paths, and provide development opportunities to increase engagement and lower turnover. I like the concept of "Training Tuesdays" where 30 minutes each week is dedicated to a presentation on a topic. It can be anything from the benefits plan, to using salesforce, to how to increase sleep quality, etc. If your people feel like they are growing and valued, they will stay.

Examples include how Zappos has built such a high level of engagement. Zappos created several ways to engage its employees, including Zappos Zollars. Employees can earn the company currency by going above and beyond in their work and the Zollars can be used for branded goodies, charitable donations or in raffles for bigger prizes.

Their employees can also participate in their Grant-a-Wish program, which allows them to suggest and grant wishes for their team members. It’s a great way for employees to express gratitude to other people in the company and give them a fun experience – whether that’s dance lessons, riding in a hot air balloon or taking a mini vacation.

The company’s emphasis on engagement starts from the moment someone is hired. After their initial training, they participate in a scavenger hunt that helps them get to know other employees.

For example, they may be tasked with finding someone wearing a Zappos hat and asking them about their job, so they can get to know them. Simple but mighty effective.